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Five money fears and how to squash them

Money fears are common, but they don't have to keep you up at night. Squash them by taking adequate precautions.

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    Auguste Rodin's sculpture "The Thinker" is shown outside The Detroit Institute of Arts in Detroit (2012). Detroit suffered from severe financial trouble and recovered.
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Remember when you were afraid of the bogeyman? We all knew he wasn't real, but that didn't stop our fears. For most of us, that same bogeyman is alive in our finances. If you've had a bad month, or even a bad year or two, it's really easy to let fear take over.

Below are five irrational (although they might feel very real for you) money fears and some simple solutions to squash them.

1. I Lost My Job; I'm Never Going to Make It!

Even if you have the most "perfect" job and your boss loves you, there is always a chance that you could lose it. The company could have a bad year and need to lay off staff. They might downsize. Or, maybe they get bought out and decide they don't need you on board.

Recommended: Fifteen best entry-level jobs of 2015

Squash It

Preparation is key to squashing this money fear, which means preparingbefore you lose the job. Make sure you button up your emergency fund savings with at least three to six months of your monthly expenses, and keep it in a high-yield savings account (Discover Online Savings or Capital One 360). As the name implies, an emergency fund will help you breeze into temporary unemployment and keep you from having to turn to your credit cards to pay your monthly expenses.

2. My 401K Lost 5%, I'll Never Be Able to Retire!

For those who had money in a 401K during 2008 and 2009, losing just 5% would have seemed like a miracle. Depending on their exposure, retirement investors lost 25%–30% (or more) of their account values in a really short period of time. Now that's a bad day! A 401K, like any investment, is going to have good times and not-so-good times.

Squash It

The best way to squash this fear of never being able to retire is to commit to a monthly investment amount (called dollar-cost-averaging), rebalance your funds annually, and for heaven's sake, don't look at your account every day. With dollar-cost-averaging you'll be buying some funds during the good days, and some on the not-so-good days — but the objective is that it evens out and keeps you marching towards your retirement goals.

3. My Spouse-to-Be Makes More Than Me — It's Not Fair!

Rarely do you find a relationship where both people make exactly the same amount of money. When you pile getting married on top of that all, it can be a real recipe for disaster.

Squash It

Having open communication with your future spouse is key before you get married. Come up with a game plan together about how you will allocate your funds for things like savings, paying off debt, and the goals you are trying to achieve. Another way to squash this fear is to create two separate "fun" funds. In each fund, put the same amount of money each month, so each person can spend their money as they wish with no questions from the other.

4. I've Made Too Many Money Mistakes!

Money mishaps can really keep us from making positive strides in our finances. The truth is everyone has financial setbacks in life, but the key is in how you recover and what steps you take to prevent them from happening again.

Squash It

To get better at anything, you've got to learn from your mistakes, but more importantly, forgive yourself. Take out a piece of paper and write down all of your money mishaps without censoring yourself in the next five minutes. Once you are done, take a look at them all, remember what you've learned, and then tear up the piece of paper. They are in your past.

5. I Won't Be Successful if I Don't Own a House!

Owning a house is the American dream. The problem is not all of us canafford a house, and certainly not a $15 million dollar stunner like you'd see on an episode of the Kardashians.

Squash It

Owning a home is great. However, it isn't for everyone. If you want to own a home, the most important thing you can do is to work with a mortgage broker before you go shopping, find out what you can afford, and then take a serious look at your budget. If you plan on staying put for a few years and the numbers work, then go for it. If not, take this money fear off the table and be happy that if you decided you wanted to move to Berlin tomorrow, you could pack your bag and be on a plane in an hour.

This article first appeared at Wise Bread.

The Christian Science Monitor has assembled a diverse group of the best personal finance bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on the link in the blog description box above.

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